As Toronto’s Real Estate market continues to perform insanely, there has never been a more difficult time for first time homebuyers to acquire a resale home. If you are lucky enough to be one of 20% of Canadians who receive financial assistance from their parent towards a downpayment, you still are not immune to the bidding wars that buyers currently face. Ontop of that, there aren’t just as many options for buyers as inventory continues to hit record low numbers.
As supply continues to plunge, first time homebuyers are exploring the option of buying precons.
For some context, Precons – also known as preconstruction homes or precon condos – are soon-to-be built properties that developers sell before completion. Developers will typically set up a model home for buyers to have an idea of what the new home will look like. Vital details such as floor plans and renderings will also be available to help visualize the potential space. Since this is a new construction, buyers are usually able to customize specific items such as the color of the cabinets, kitchen countertops etc.
Why You Should Buy Precon
Well the answer is obvious. Ontario’s Minister of Housing, alongside a Special Provincial Housing task force recently revealed that in order to resolve the low supply housing issues, Ontario would need to build 1.5 Million new homes in the next 10 years.
Now what this means is that these new homes when built would mostly be sold in preconstruction phases. If you are looking to buy a home and you overlook this opportunity, you might have to buy the same homes several years later as resale homes while paying a hefty price way more than preconstruction prices.
You Get Enough Time to Come Up With the Money You Need
Buying a precon allows you the flexibility to spread deposits over many months and even up to years. In juxtaposition with resale homes, buying precon is pocket friendly and guarantees your spot in the Real Estate Market as opposed to waiting for a mortgage and then paying full amount for a resale property.
Most importantly, buyers are not required to get a mortgage until construction is complete. This gives buyers the opportunity to lock in on a precon sale project and have more time to make necessary arrangements to get a mortgage several years down the road while construction is being developed.
You Can Customize the Construction
Buying a Precon gives you the freedom to customize your home.
With resale homes, the building is already in place. So, for the most part, you get what you see. You may not be able to do much to correct the features you do not like. Even if you can change the design of a resale home, you will have to spend which is usually not cheap.
When you get a precon, the building is either under construction or in the preconstruction stage. This means that nothing is set in concrete yet. So, you can get the builder to design the property to your taste. You get to choose the room layout, the colors, the finishes, amongst other things.
Passive Investments & Returns
Buying a Precon home is passive. You pay passively while your home or investment grows passively in value way before completion. Unlike resale homes, when you own a precon, you do not have to worry about rent, mortgage payments, or operating expenses. The value of your preconstruction home goes up in value after it is completed.
It Is Harder to Get Resale Homes Right Now
Resale homes are still a choice for many people, and I understand this. But currently and for the nearest future, they will remain short in supply.
What does this mean for you? Well, with a limited supply of resale homes, prices will go up. In other words, you may end up buying your resale property above its actual value.
So, instead of getting caught in the brewing uncertainty of the resale property market, why not buy precon condos? They will always be available, and they are affordable while they appreciate over time.
Final Take
The preconstruction home sales industry will see a monumental boom in the years to come. The interests in precon condos are growing already, and the sphere will keep changing every day. To stay abreast of advances in the field, Register at buyprecon.ca for access to reputable new developments across the Greater Toronto Area before they are announced to the public.
